MONTHLY REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS IN THE NINTH FEDERAL RESERVE DISTRICT

JOHN R. MITCHELL, Chairman of the Board CURTIS L. MOSHER F. M. BAILEY OL/YER S. Powam. and Federal Reserve Agent Assistant Federal Reserve Agents Statistician

Serial \ Vol. IV \No. 170/ Minneapolis, Minnesota February 28, 1929

DEBITS TO INDIVIDUAL ACCOUNTS AT 80 conditions in the various trade territories of the dis- CITIES trict. A secondary objective was to secure a larger sample of the individual debits of the district than Beginning with January 1929, the number of cities was provided by the seventeen cities previously re- in this district for which the banks report debits to porting. As a matter of fact, the increase in accuracy, individual accounts has been greatly increased. Since due to increase in the sample, will probably be very 1919, weekly reports have been received from a slight. In January 1929, the increase in individual few cities which increased from nine cities in 1919 debits over January 1928 was exactly the same for to seventeen cities in 1924 and subsequent years. the seventeen cities as for the larger group of cities The new additions to the reporting cities will furnish (including the seventeen cities) from which reports their figures on a monthly basis. have so far been received. In recent weeks, letters were mailed to the cashiers It is difficult to make an exact statement as to the of all banks in a selected list of representative cities, size of the sample of individual debits which is inviting the banks in these cities to report their in- obtained through the reports from these eighty dividual debits to this office. The response was most cities. The population of these cities in 1 920 was gratifying. Up to the time of writing, sixty-three 30 per cent of the population of the district. This, cities have accepted the invitation, making the total of course, under-estimates the proportion of the in- number of cities from which debits to individual dividual debits of the district which is represented accounts are received eighty. In nearly every city by reports from these cities, since each of the cities all banks are willing to report. In a few cities where has a large trade territory outside of the corporate part of the banks do not wish to report their in- limits of the city. Measuring another way, the de- dividual debits, it is believed that the figures of posits of banks in these eighty cities were 58 per reporting banks are fairly representative of the city cent of the total bank deposits of the district on as a whole. June 30, 1928. This way of estimating the size of The objective sought in increasing the list of the sample of individual debits exaggerates the facts, cities reporting individual debits was to secure more since a considerable fraction of the deposits of exact information regarding changes in business banks in the reporting cities consists of deposits due

Cities in the Ninth Federal Reserve District which will report Debits to Individual Accounts. The black dots indicate the cities which have been reporting since 1924 or earlier. The circles indicate the cities which have been added to the reporting list beginning with 1929.

202 AGRICULTURAL AND BUSINESS CONDITIONS February 28. 1929

to other banks which do not enter into the debits The statistics for individual cities are quoted in calculation. The size of the individual debits sample, the following table. Where some of the banks in a therefore, remains an uncertainty, but from con- city are not reporting, the number of reporting banks ferences held with persons who have made a special is given below, following the name of the city. The study of the trade territories of the various cities of number of banks in Minneapolis which are included the Northwest, it seems probable that the individual in the table below is larger than the number of debits sample will be about 45 per cent of total in- banks which make weekly reports. dividual debits for the district. DEBITS TO INDIVIDUAL ACCOUNTS IN THE Although the increase in debits to individual ac- NINTH FEDERAL RESERVE DISTRICT counts reports is a noteworthy improvement in the Jan. 1929 Jan. 1928 statistical knowledge of business conditions in the Number of business days 26 25 district, it does not eliminate the need for other Michigan indexes of business activity. There are a multitude Escanaba (I Bank) $992,000 $851,000 of smaller cities, towns and other business units Iron Mountain. 6,027,000 5,538,000 Manistique (I Bank) 557,000 which are not represented by the individual debits Marquette (2 Banks) 5,507,000 4,799,000 reports. Furthermore, the individual debits reports Minnesota themselves are of a very general nature and do not Albert Lea 2,906,000 2,976,000 make possible any statement as to the growth or Austin (I Bank) 1,309,000 978,000 shrinkage of any certain line of trade or industry. Chaska 572,000 544,000 Cloquet 2,083,000 2,207,000 Wherever unusual changes in debits to individual Crookston (1 Bank) 1,021,000 971,000 accounts occur, it is interesting to note the causes. Detroit Lakes . 839,000 For example, at Iron Mountain, Michigan, an in- Duluth 66,721,000 63,591,000 Ely 555,000 crease in operations by the Ford Motor Company Ely (I Bank) 254,000 282,000 has increased employment by one thousand persons, Glenwood 406,000 455,000 which is reflected in an increase in the individual Hutchinson (2 Banks) 1,214,000 1,172,000 debits for that city. At Chippewa Falls, Wisconsin. Little Falls 993.000 1,062,000 a decrease in individual debits, as compared with Mankato 6,603,000 6,456,000 Minneapolis 435,800,000 377,037,000 January 1928, was reported owing to the fact that Morris 659,000 558,000 a large dam was under construction by the Northern Owatonna 2,576,000 States Power Company in the earlier period. Such Owatonna (1 Bank) 1,194,000 1,301,000 information translated into debits to individual ac- Park Rapids 446,000 427,000 counts promises to be of great importance to busi- Red Wing 2,543,000 2,840.000 Rochester 7,038,000 5,262,000 ness men in general and particularly to the business St. Paul 183,444,000 177,285,000 men of the communities making the reports. South St. Paul 35,325,000 38,642,000 Stillwater 2,862,000 On the basis of reports received, the following Thief River Falls. 646,000 635,000 table gives the percentage relationship between the Virginia 2,531,000 2,273,000 volume of individual debits in January 1929 and Wabasha 750,000 822,000 the volume in January 1928. Not all cities were able Wadena (I Bank) 358,000 376,000 Willmar 1,609,000 1,264,000 to provide their figures this first month in time to Winona 7,752,000 7,195,000 have them included in these percentages. It should Worthington (1 Bank) 750,000 617,000 be noted that January 1929 had one more business Montana day than January 1928, and consequently, it would Billings 9,480,000 7,892,000 be necessary to subtract about 4 per cent from the Bozeman 2,686,000 percentages quoted below to secure strictly com- Bozeman (2 Banks) 2,167,000 1,975,000 parable figures. Deer Lodge 1,383,000 1.299,000 Glendive 1,191,000 1,311,000 Helena 10,332,000 7.997,000 DEBITS TO INDIVIDUAL ACCOUNTS IN THE Lewistown 2,690,000 2,554,000 NINTH FEDERAL RESERVE DISTRICT Miles City (I Bank) 1,796,000 1,930,000 North Dakota January 1929 divided by January 1928 Bismarck 4,111,000 3,703,000 Devils Lake 1,793,000 1,783,000 Per cent Dickinson 1,709,000 1,571,000 Duluth 05 Fargo . 19,416,000 14,029,000 Grand Forks 7,844,000 7,182,000 Minneapolis 16 Jamestown 2,567,000 2,384,000 St. Paul 03 • Mandan (I Bank) 473,000 487,000 South St. Paul 91 Minot 6,965,000 5,971,000 Other Minnesota 07 Wahpeton 1,023,000 953,000 Michigan, northern peninsula 12 Williston 1,409,000 1,301,000 Montana 16 South Dakota North Dakota 20 Aberdeen 6,681,000 6,239,000 Brookings (I Bank) 1,072,000 1,178,000 South Dakota 20 Huron 6,350,000 5,290,000 Wisconsin, 26 counties 05 Lead 1,275,000 1,256,000 Ninth District 11 Madison (1 Bank) . 798,000 u-V =6;4.0 V4` vP1

TH FEDERAL RESERVE STRICT 203

Mitchell (I Bank) 2.168,000 1,634,000 linseed product shipments and carloadings of grains Mobridge 806,000 664,000 and grain products, livestock, forest products and Pierre 1,362,000 1,680,000 Rapid City 4,019,000 2,981,000 less-than-carlot merchandise. Building contracts Sioux Falls 22,349,000 18,101,000 were twice as large in January as in the same month Watertown 5,839,000 4,709,000 last year, largely on account of the granting of a 4 Yankton (2 Banks) 1,898,000 1,145,000 million dollar contract for an office building in Wisconsin Minneapolis. Building permits, on the contrary, Ashland ., were 39 per cent smaller in the eighteen reporting Chippewa Falls 2,462,000 3,043,000 cities during January than in the same month last Eau Claire 8,069,000 year. Business failures in January 1929 were 40 Eau Claire (1 Bank) 2,459,000 2,398,000 Hudson 562,000 per cent fewer than in January 1928. Hudson (2 Banks) • 270,000 252,000 La Crosse 13,194,000 11,254,000 During the first two weeks of February, debits Merrill (2 Banks) 1,603,000 to individual accounts at seventeen Cities were 15 Superior 7,964,000 8,081,000 per cent larger than in the corresponding weeks NOTE: Reports have also been promised from the follow- last year. In the first thirteen business days of Feb- ing cities: Hancock, Iron River, Caspian, Stambaugh, Me- ruary, country check clearings were 8 per cent nominee and Negaunee, Michigan; Benson, Chisholm. and Wheaton, Minnesota; and Butte, Great Falls, and Havre, larger than in the corresponding days of February Montana. last year. The daily average of contracts awarded DEFINITION OF DEBITS TO INDIVIDUAL ACCOUNTS during the first fifteen days of February, as reported For the most part debits to individual accounts are checks against by the F. W. Dodge Corporation, was 97 per cent depositors accounts and thus represent business payments. Debits to individual accounts of banks are all debits against accounts of indi- larger than the daily average of contracts awarded viduals, Arnie, corporations and government accounts, including war in the month of February 1928. loan deposit accounts: and also debits to savings accounts, payments from trust accounts and certificates of deposit paid. Debits to individ- ual accounts do not include debits In settlement of clearing house bal- The value of cash crops and hogs marketed dur- ances nor debits to correspondent bank accounts nor payments of cashiers checks, charges to expense and miscellaneous accounts, cor- ing January was 22 per cent less than the value of rections and similar charges, these products marketed in January a year ago. The value of dairy products marketed during DISTRICT SUMMARY OF BUSINESS December exceeded the value of dairy products The volume of business in this district during marketed in December 1927 by 20 per cent. Prices January exceeded the volume of business in Janu- of corn, flax, butter, hens, cattle, calves, lambs and ary a year ago. The daily averages of debits to indi- ewes were higher in January than a year ago, while vidual accounts at reporting cities and of country prices of wheat, oats, barley, potatoes, fluid milk. check clearings were 7 per cent larger in January eggs and hogs were lower than a year ago. than in the corresponding month last year. Country check clearings exhibited an unusually sharp de- DISTRICT SUMMARY OF BANKING crease from the December volume. Increases in January over the same month last year were shown Country member banks increased their borrow- in postal receipts, country lumber sales, wholesale ings slightly at the Federal Reserve Bank during the hardware sales and freight carloadings of coal, four weeks ending February 13. This is contrary to coke, ore and miscellaneous merchandise. Decreases the trend at this time of year which has occurred were reported for department store sales, securities in all of the last six years. In these years borrowings sales, wholesale shoe and grocery sales, flour and have shown a small but rather steady decline until 96 ISO so Country Clearings Index i 110 i 122 i kw= 120 11111111111111 minpfla._t 41 • 100 MEM 11 i I so 111111111" limilin 7 111 so MM.• 10 IIII •./F= 1 7 ti =Mg- rtIMM Yo/-111=11.?-.7 t _1111111 114- IN Debits to Individual Accounts at Banks in Seventeen Cities Country Check Clearings index for the Ninth Federal in the Ninth Federal Reserve District. The heavy curve rep- Reserve District. The light curve represents figures without resents figures adjusted to eliminate seasonal changes; the seasonal adjustments. The heavy curve represents, figures light curve represents unadjusted figures as percentages of with seasonal adjustments. the average mon,-

Ifi 204 AGRICULTURAL AND BUSINESS CONDITIONS February 28. 1929

March or April. Grouping banks by states, it ap- The deposits of country member banks increased pears that banks in all parts of the district shared in 8 million dollars, or 2 per cent, during the year the increase in borrowings which has occurred in ending January 1929. This increase loses its entire recent weeks, except banks in rural Minnesota and business significance, however, upon close analysis, South Dakota. On February 13, country member for additions to deposits due to the absorption of a banks were borrowing $1,356,000 more from the non-member bank by a member bank in Montana Federal Reserve Bank than a year earlier. Balances and due to the entry of two non-member banks into carried by country member banks with city corre- the Federal Reserve System in Wisconsin accounted spondent banks in this district remained about sta- for the entire increase for the year. In the other tionary during the four weeks ending February 1 3, states, deposit increases and decreases offset each but were 18 million dollars less than a year ago. other. There was a 5 million dollar increase in de- MILLION DOLLARS MILLION DOLLARS i I I I I I COUNTRY MEMBER BANK DEPOSITS 510 511

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MICH. 0 5 COUNT1tS) 4 2( 19 23 24 1/ 193. Country Member Bank Deposits in the Ninth Federal Reserve District. These country member banks are all member banks in cities with less than fifteen thousand population. The scales have been exaggerated to make the changes in depos- its more apparent. NINTH FEDERAL RESERVE DISTRICT posits in South Dakota, counter-balanced by a 3 SERIOUS LOSSES FROM WHEAT SMUT million dollar decrease in deposits in North Dakota A smut tax, amounting to forty-five cents per and a 2 million dollar decrease in rural Minnesota. acre, was levied on every acre of wheat in Minne- Deposits in the upper peninsula of Michigan were sota, North Dakota, South Dakota and Montana practically unchanged. this year. Conservative estimates, based upon reli- able data supplied by the Minnesota Grain Investi- An improvement has been made in the monthly gation Department, place the market loss on the records of deposits of member banks, beginning 1928 spring wheat crop grading smutty at the termi- with the month of January 1929. This improvement nal markets at over $3,000,000. The yield loss may consists of computing daily averages of deposits for be estimated to amount to over 5 million dollars. the entire month instead of computing deposit totals The 8 million dollar loss expressed in terms of for a single day, as has been done heretofore. Con- average loss per acre of wheat amounts to nearly sequently, the comparison noted in the preceding forty-five cents per acre. paragraph is between country member bank de- posits on January 11, 1928 and the average for This forty-five cent tax is a preventable one. The January 1929. farmer who has smutty seed wheat may disinfect the seed and eliminate this tragic waste by an in- City member banks, which make weekly reports vestment of about five cents per acre. The agricul- to the Federal Reserve Bank, experienced no change tural colleges, the railroads, the Northwest Crop in deposits during the four weeks ending February Improvement Association and many other interests 13, and their total deposits on that date were are making every effort to induce all farmers to 10 million dollars below the level of the same date treat all seed wheat this spring. Bankers of the Ninth in 1928. On the asset side of the combined balance Federal Reserve District should use their influence sheets of these banks there was little significant in persuading all farmers to treat all their seed change during recent weeks. There was a slight de- wheat. crease in "all other loans." These "all other loans" When bankers are talking to their patrons about were larger on February 13 than on the corre- seed treatment they may find some who declare sponding date in 1928 or 1927, but were smaller that they treated their seed last year and yet had than on the corresponding dates in the other years smut infection. Failure to control smut on the part of the record. Borrowings from the Federal Reserve of the farmer is usually due to faulty chemicals, or Bank by these city banks changed very little during careless seed treating methods. The latter is the the month ending February 13, but were 7 million principal reason for failure. The directions for seed dollars larger than a year ago. treating are simple, but those same apparently sim- Interest rates at Minneapolis on prime commer- ple directions must be followed explicitly. There are cial loans showed a small increase in the month no short cut methods of seed treating. Thorough ending February 15. All rates were higher than a seed treatment with either copper carbonate dust year ago, as shown by the following table: or formaldehyde will control smut. Reliable direc- tions for seed treating may be obtained from any 1929 1928 of the county agricultural agents, the state agricul- Prime Bank Loans (Average) 5.96 4.81 tural colleges, the United States Department of Commercial Paper 5 3/4 41/4 Agriculture or the Northwest Crop improvement Federal Reserve Discount Rate 4 1/2 4 Association at Minneapolis.

The 1928 Wheat Smut Situation. The bIack dots indicate station points where over 50 per cent of the spring wheat shipments, graded smutty. The circles show points with between 25 and 50 per cent of the shipments grading smug. Practically all stations ship some cars of smutty wheat. Data from the Minnesota State Grain Investigation Depart

206 AGRICULTURAL AND BUSINESS CONDITIONS February zs, 1929

COMPARATIVE STATISTICS OF BUSINESS IN THE NINTH FEDERAL RESERVE DISTRICT %Jan. %Jan. 1929 1929 of of Dec. Jan. Debits to Individual Accounts, Daily Averages-Unit Jan., 1929 Dec., 1928 Jan., 1928 1928 1928 17 Cities $32,222,000 $37,606,000 $30,209,000 86 07 Minneapolis 16,672,000 19,019,000 14,999,000 88 11 St. Paul 7,056,000 8,137,000 7,091,000 87 00 Duluth-Superior 2,872,000 4,025,000 2,867,000 71 00 8 Wheat Belt Cities 2,500,000 2,977,000 2,131,000 84 17 4 Mixed Farming Cities 1,763,000 1,964,000 1,576,000 90 12 South St. Paul 1,359,000 1,484,000 1,546,000 92 87 Ca rl oadings-N o rthwestern District- Total---Excluding L. C. L. Cars 340,423 317,276 343,167 07 99 Grains and Gram Products Cars 50,057 54,849 56,015 91 89 Livestock Cars 41,209 38,888 43,020 06 96 Coal Cars 46,423 36,847 38,978 26 119 Coke Cars 7,548 5,926 7,038 27 107 Forest Products Cars 61,849 55,831 73,763 11 84 Ore Cars 2,396 2,125 2,070 13 116 Miscellaneous Curs 130,939 122,810 122,283 07 107 Merchandise-L. C. L. Cars 123,023 125,746 126,750 98 97 Building Permits- Number-I8 Cities 371 813 529 46 70 Value-I8 Cities $1,397,800 $2.440,200 $2,294,900 57 61 Minneapolis 734,700 905,500 825,900 81 89 St. Paul 234,200 705.600 326,900 33 72 Duluth-Superiqr 15323:690000 169,400 834,800 90 18 4 Wheat Belt Cities 115,500 41.900 29 81 6 Mixed Farming Cities 203,100 449,100 123,100 45 165 4 Mining Cities 30,300 95,100 142,300 32 2 I Building Contracts Awarded- Total 6,220,900 3,828,000 3,102,000 163 201 Residential 483,400 1,170,800 1,160,200 41 42 Commercial and industrial 4,602,800 801,400 865,700 574 532 Public Works and Utilities 794,700 856,500 561,900 93 142 Educational 77,800 881,300 357,700 9 22 All Other 262,200 118,000 156,500 222 168 Cash Value of Farm Products Sold- Bread Wheat 6,751,000 12,947,000 9,899,000 52 68 Durum Wheat 2,640,000 6,648,000 5,452,000 40 48 Rye 589,000 1,036,000 989,000 57 60 Flax 622,000 1,345,000 1,054,000 46 59 Potatoes 1,628,000 1,009,000 2,689,000 161 61 Dairy Products-See Note 18,269,000 16,405,000 15,229,000 111 120 Hogs 18,209,000 17,266,000 19,624,000 105 93 Grain Stocks at End of Month at Minneapolis and Duluth-Superior- Wheat Bu. 53,521,331 54,664,633 35.215,612 98 152 Corn Bu. 2,257,115 1,109,408 1,863,813 203 121 Oats Bu 1,386,740 2,557,896 7,380,723 54 19 Barley Bu. 3,981,135 3,709,960 778,073 107 512 Rye Bu 2,876,754 2,569,989 2,212,841 112 130 Flax 13u 1,063,498 1,313,818 3,329,471 81 32 Median Cash Grain Prices- Wheat-No. 1 Dark Northern Bu. $1.281/2 $1.2134 $1.38 05 93 Durum-No. 2 Amber Bu. 1.17 1.061/2 1.26 10 93 Corn-No. 3 Yellow Bu. .90 .78 .851/4 15 106 Oats-No. 3 White Bu .46 .431/4 .521/4 06 88 Barley-No. 3 Bu. .651/2 .58 .83 13 79 Rye-No. 2 Bu 1.03 .99 1.02 Ys 04 100 Flax-No. 1 Bu. 2.45 2.381/2 2.23 /.4 03 109 Wholesale Produce Prices-- Butter Lb. .451/2 .47 .45 97 101 Milk Cwt. 2.50 2.61 2.57 96 97 Hens--41/2 Pounds Lb. .221/2 .201/2 .20 110 113 Eggs Doz. .30 .331/2 .35 90 86 Potatoes Bu .63 .60 1.091/2 105 58 Note: Dec., 1928; Nov., 1928; and Dec., 1927.

WOM NINTH FEDERAL RESERVE DISTRICT 207

COMPARATIVE STATISTICS OF BUSINESS IN THE NINTH FEDERAL RESERVE DISTRICT (Continued) %Jan. %Jan. 1929 1929 of of Dec. Jan. Livestock Receipts at South St. Paul-Unit Jan., 1929 Dec., 1928 Jan., 1928 1928 1928 Cattle Head 51,708 56,795 61,616 91 84 Calves Head 43,863 41,802 50,051 105 88 Hogs Head 341,946 345,550 442,225 99 77 Sheep Head 67,833 70,064 56,337 97 120 Median Livestock Prices at South St. Paul- Butcher Cows Cwt. $8.50 $8.25 $6.00 03 142 Butcher Steers Cwt. 11.00 10.50 8.50 05 129 Prime Butcher Steers Cwt. 12.50 12.50 9.50 00 132 Stocker and Feeder Steers Cwt. 9.50 9.00 7.00 06 136 Veal Calves Cwt. 14.00 12.50 11.50 12 122 Hogs Cwt. 8.70 8.25 11.70 05 74 Heavy Hogs Cwt. 8.65 7.85 10.75 10 80 Lambs Cwt. 15.75 13.50 12.50 17 126 Ewes Cwt. 9.75 7.00 6.25 39 156 Flour- - Production-Twin Cities and Duluth- Superior Bbls. 1,056,741 1,110,611 1,223,347 95 86 Shipments from Minneapolis Bbls. 973,412 890,588 1,143,156 109 85 Linseed Products Shipments from Minneapolis-Lbs. 37,192,802 34,516,591 40,079,531 108 93 Retail Sales- Department Stores $2,056,400 $3,774,880 $2,080,460 54 99 Furniture Stores 427,930 590,510 392,490 72 109 Country Lumber Yards Bd. Ft. 5,489,000 7,807,000 4,764,000 70 115 Retail Merchandise Stocks- Department Stores $5,764,920 $5,733,700 $6,182,460 101 93 Furniture Stores 2,509,450 2.564,130 2,638,330 98 95 Country Lumber Yards Bd. Ft. 79,400,000 72,771,000 84,686,000 109 94 Life Insurance Sales-(4 States) $20,780,000 $29,614,000 $17,953,000 70 116 Wholesale Trade- Farm Implements 51,770 68,810 92,350 75 56 Hardware 1,655,980 1,960,450 1,432,940 84 116 Shoes 267,420 334,320 338,600 80 79 Groceries 4,396,850 4,244,440 4,430,890 104 99 Business Failures- Number 56 56 94 100 60 Liabilities $696,709 $447,700 $552,950 156 126 Securities Sold- To Banks 1,596,600 1,344,400 4,069,000 119 39 To Insurance Companies 1,034,000 810,000 1,157,100 128 89 To General Public 10,034,100 6,567,000 10,647,900 153 94 Real Estate Activity in Hennepin and Ramsey Counties- Warranty Deeds Recorded 1,206 3,215 622 38 194 Mortgages Recorded 1,398 1,572 1,358 89 103 Member Bank Deposits- In Cities under 15,000 Population $462,195,000 $470,301,000 $454,367,000 98 102 In Cities over 15,000 Population 461,188,000 478,948,000 455,025,000 96 101 %Feb. %Feb. 1929 1929 of of Jan. Feb. 24 City Member Banks- Feb. 13, 1929 Jan. 16, 1929 Feb. 15, 1928 1929 1928 Loans Secured by Stocks and Bonds $79,977,000 $84,614,000 $82,375,000 95 97 All Other Loans 173,388,000 176,262,000 165,859,000 98 105 Securities 130,637,000 130,906,000 133,562,000 100 98 Net Demand Deposits Subject to Reserve 215,565,000 221,347,000 226,881,000 97 95 Time Deposits 139,237,000 141,348,000 137,575,000 99 101 Borrowings at Federal Reserve Bank 8,493,000 10,409,000 1,500,000 82 566 Minneapolis Federal Reserve Bank- Bills Discounted 11,483,856 13,341,558 3,232,582 86 355 Federal Reserve Notes in Circulation 61,274,295 61,978,890 56,274,730 99 109 208 AGRICULTURAL AND BUSINESS CONDITIONS FeLtual) 26, 1929

P7 " ■4[ INDUSTRIAL PRODUCTION

2 ■ 12C

1011111.irilligadi 0C Summary of National Business Conditions

ep 80 (Compiled February 26 by Federal Reserve Board)

ENE 1925 1925 1927 1925 192 Manufacturing and mining increased in January and the first part of February, Index number of production of mane. while building continued to decline. Wholesale commodity prices rose slightly. factures and minerals combined, adjusted Reserve bank credit declined between the middle of January and the middle of for seasonal variations (1923-25 average= 100. Latest figure, January, 117, February, reflecting chiefly a reduction in reserve balances of member banks.

PRODUCTION: Industrial production irtereased in January and continued to be larger than a year ago. The output of pig iron, steel ingots and automobiles was Rr ,,, —r 20 in record volume for January. The high rate of steel activity reflected large pur- WHOLESALE PRICES chases from automobile manufacturers and also increased demand from railroads. Domestic output of refined copper, while continuing in large volume, 10 Ehi‘w. 110 was somewhat lower in January than in December. The activity of textile mills increased consider- ably in January. In the mineral group, the output of copper ore, bituminous coal and 100/Ahmi sir 100 petroleum was exceptionally large and anthracite coal and tin also increased. In the first part of February, preliminary reports indicate the maintenance of a high 9 level of industrial activity. Steel plants operated at a high percentage of capacity; the output of coal continued large and employment in Detroit factories increased. ME a0 The production of petroleum, however, declined slightly in the middle of February. 1925 1526 1927 1974 1979 Index. of United States Bureau of Labor Building activity declined in January for the third successive month, Statistics (1926=-100, base adopted by Bu- reflecting reau.) Latest figure, January. 97.2. primarily a large reduction in awards for residential building, while commercial building awards increased somewhat. The value of building contracts let during the first six weeks of the year was substantially lower than in the corresponding period

101 of either 1928 or 1927. RESERVE RANK CREDIT TRADE: Shipments of freight by rail increased during January and the first 1 al - Ali ,,ü0 . 500 two weeks of February, and were larger than a year ago. The increase during Janu- Eirrnall ary reflected primarily larger shipments of coal and coke and live stock. Sales by 1000 wholesale firms were seasonally larger in January and above the level of a year ago. rt,Int. L,, Department store sales declined less than is usual at this season and were consider- AL_ Ai ]OC.F1 ably higher than, in January, 1928. so

q 11113674•P ;:7 ME Q° PRICES: The general level of wholesale prices rose somewhat in January.

1915 1975 1927 1926 10 Prices of grains, live stock and meats advanced and there were also price advances Monthly averages of daily figures for 12 in steel, automobiles and capper. A decrease in the group index for building mate- Federal reserve banks. Latest figures are rials reflected reductions in the prices of lumber and brick and prices of pig iron, averages of first 23 days of February. silk, cotton and petroleum also declined. Among the raw materials, rubber advanced sharply in price, while silk, cotton and hides declined. During the first half of Feb- ruary, the price of copper advanced to a new high level, and the price of rubber DES GE continued to rise. Among the agricultural commodities, prices of wheat, corn and MONEY RATE IN NEWYOR hogs rose, while sugar and cattle declined slightly.

BANK CREDIT: On February 20, total loans and investments of member Ali 5 banks in leading cities were nearly $90,000,000 smaller than in the middle of 4 4 January, owing chiefly to reductions in the banks investment holdings. After the FAILFRATliaillim first week in February, security loans declined, while all other loans, largely com- 3 mercial, increased somewhat in February. During the five weeks ending February r• Ce.a.e,o4fAvre, RS., — 44....43/724O.:c0.47/A574 2 20, a decline in the reserve balances of member banks, together with a considerable -- An04.3400. A44 inflow of gold from abroad and some further decline in the demand for currency IIII 1975 1924 152Y 1924 1429 were the chief factors accounting for a decline of $173,000,000 in the volume of Monthly fates in the open market in Reserve bank credit in use. A large decline in Reserve bank holdings of acceptances New York; commercial paper rate on 4- to and United States, securities was offset in part by a small increase in the volume of 9-month paper and acceptance rate on 90- lay bankers acceptances. Latest figures are member bank borrowing. Open market rates on bankers acceptances and com- averages of first 23 days in February, mercial paper advanced, while rates on collateral loans showed little change.

a